I have about as much faith in economists (Nobel prize winners or not) as I do in witch doctors, but he's not really talking economics here.

One point that made me chuckle, he stated that most people in the financial sector agreed that the bailout of the financial sector prevented a depression. Well duh. Ask the unemployed whether or not the unemployed should be bailed out and you'll get the same response. Ask people who are underwater on their mortgages if bad mortgages should be bailed out, and you'll (surprise!) get the same response. It's a completely disingenuous statement, and leaves me with the feeling that there's a certain amount of misdirection here, as well as reinforcing my belief that economics is at best, a pseudo-science.

Moving this video to NetRunner's personal queue. It failed to receive enough votes to get sifted up to the front page within 2 days.

Think in reverse. What if the financial sector was not saved? >> ^Stormsinger:
One point that made me chuckle, he stated that most people in the financial sector agreed that the bailout of the financial sector prevented a depression.

@Farhad2000
Then the people who caused this crisis would probably not be getting multi-million dollar bonuses this year (while millions have no job at all), would they? From my personal point of view, it's damned hard to see how things could have turned out worse...I've lost everything I worked for over the last 35 years, and we're just a few months from finding ourselves living on the street. This, in spite of the fact that I had not one thing to do with this crisis. I, and millions like me, are paying the price, instead of those who actually caused it.

Honestly, you really think that taking advice from the very people who caused the problem is the best course? If they are so knowledgeable and bright, how did we get here? Why didn't they see it coming beforehand?

I believe the answers are pretty plain. They're -not- bright and knowledgeable...they're short-sighted and greedy, and don't give a damn who gets hurt as long as they continue to pull in huge amounts of unearned wealth. They should be doing hard time, rather than being asked for guidance.

Sadly, it's quite plain that nothing meaningful is going to be done to ensure that it won't happen again. So, to judge by history, we'll see another such crisis in a decade or so.

@Stormsinger
I agree with you on the fact that the people responsible have not been punished, but who is exactly responsible? Everyone knew trading in the housing market was a huge gamble, but the people with the mathematical models believed they eliminated the risk, their fund managers did as well as did many of the millions of firms and hedge companies.

However that's one thing, but allowing many more companies to collapse would have pulled the entire financial sector down, because no one knew who was exactly in for how much for the damage. The government stepping in and rescuing them was a good step, but the huge bonuses was a publicity disaster. I don't buy the whole rationale of well if we didn't give them bonuses who would have stayed to work? So we agree on that.

I do believe that the government should have stepped in, capped bonuses, and reinforced the power of the SEC to not allow dubious financial instruments to get AA credit ratings.

I think Economics is a science, but a very immature one at that, I remember sitting in class discussing this with my profs and they had no clue how it would pan out. This is the first purely markets crisis we have had. The steps must be put in place to avert this happening again. But as long as firms push to make abnormal profits we will continually test the boundaries of the economy.

@Stormsinger, I hear ya, and I sympathize, but Stiglitz isn't one of the people who caused the crisis, and he has definitely been pissed at the way the bailouts were structured.

I think the point is, from a macroeconomic point of view, even a bailout that involves bad moral hazard (protecting bank CEO's jobs), can still be good for the economy, even if you would've preferred to do it in a way that would've insured that the people who made the mistakes were actually held accountable.

He's also very much in favor of re-regulating the banking industry.

This clip is just him responding to teabaggers (and Ron Paul supporters) who think everything would be fine now if the banks had been allowed to go down in flames. Simply put, it would've been much, much worse.

Guys, I'm not saying that he caused it. I'm just pointing out that he hasn't supplied -any- evidence here to support the idea that the bailout helped. His only support was the statement that "most people in the financial sector agreed that the bailout of the financial sector prevented a depression." I simply don't find that statement to carry much, or even any, weight. Even assuming that it's completely accurate, and that most of the financial types would say that, these people are not unbiased, nor have they demonstrated any particular expertise in the subject, except maybe for buying government officials and stealing from the rest of us.

Lots of people keep saying it would have been much worse, but I have yet to see the slightest actual evidence that this is true. Which is utterly typical of economists, and why I can't agree that it's a science...at best they're philosophers, with all the uselessness in the real world implied by that classification, and at worst they're con-men (which seems far more likely in most cases).

^ I can see your point.

Playing by the rules, yes, I think things would have been worse.

But if we would have played by different rules, e.g. treat the banks and the bankers as we would treat anybody who was delinquent on their loans--repossessing their toys, to start with, and kicking them out of the system--that would have helped, too.

Had we punished them and relieved the debts of the people that they suckered into ARM loans, and then went around giving money to the little people instead of handing it over by the boatload to the one's who were already rich and who, coincidentally, were responsible for the problem to begin with....

Yeah, I see your point.

>> ^Stormsinger:
@<A rel="nofollow" href="http://farhad.videosift.com" title="member since August 10th, 2006" class="profilelink"><STRONG style="color:#DCDCDC">Farhad2000
Then the people who caused this crisis would probably not be getting multi-million dollar bonuses this year (while millions have no job at all), would they? From my personal point of view, it's damned hard to see how things could have turned out worse...I've lost everything I worked for over the last 35 years, and we're just a few months from finding ourselves living on the street. This, in spite of the fact that I had not one thing to do with this crisis. I, and millions like me, are paying the price, instead of those who actually caused it.
Honestly, you really think that taking advice from the very people who caused the problem is the best course? If they are so knowledgeable and bright, how did we get here? Why didn't they see it coming beforehand?
I believe the answers are pretty plain. They're -not- bright and knowledgeable...they're short-sighted and greedy, and don't give a damn who gets hurt as long as they continue to pull in huge amounts of unearned wealth. They should be doing hard time, rather than being asked for guidance.
Sadly, it's quite plain that nothing meaningful is going to be done to ensure that it won't happen again. So, to judge by history, we'll see another such crisis in a decade or so.


Just want you to know...I'm in the same boat.

I am a few hundred dollars away from losing everything.